Ripple CLO Fires Back at Regulators, Claiming Traditional Banks, Not Crypto, Are Behind Major Money Laundering Scandals
Crypto has been scapegoated for money laundering as banks get a free pass.
Big names have joined Ripple in slamming biased regulations.
Ripple’s top legal officer, Stuart Alderoty, isn’t holding back in his latest battle with U.S. regulators. As scrutiny on the cryptocurrency industry increases, Alderoty has taken a direct shot at authorities, accusing them of using crypto as a scapegoat for financial crimes while traditional banks remain unchecked.
His sharp comments follow a bombshell report. It revealed that the New York Federal Reserve allowed millions of dollars to slip through its oversight, fueling illegal activities abroad. This has sparked a fierce debate over who’s responsible for money laundering in the global financial system.
Alderoty didn’t hesitate to criticize a Wall Street Journal report exposing the New York Federal Reserve’s failure to prevent millions from reaching terrorist groups in Iran. Despite claims that cryptocurrency fuels money laundering, Alderoty pointed the finger back at the traditional banking sector. Sponsored
“Some say money laundering is a crypto problem. Not true. Just ask the NY Federal Reserve, which let hundreds of millions of dollars slip through,” he fired off on X (formerly Twitter).
His statement echoes growing frustration within the crypto industry. Many believe regulators like the SEC and the Federal Reserve are shifting the blame for bigger financial issues onto digital assets. Alderoty isn’t alone in this fight.
Prominent figures like John Deaton, a pro-XRP lawyer and GOP Senate candidate, and Anthony Scaramucci, former White House Communications Director, have joined him in slamming regulators.
They argue that traditional banks, not cryptocurrencies, are the real culprits behind most money laundering today. Deaton backed his argument with data showing people are far less likely to use Bitcoin or other cryptocurrencies for illegal activities than conventional banking.
Major banks like HSBC, JPMorgan, and Bank of America have all faced massive money laundering scandals, overshadowing any wrongdoing in the crypto space. Ripple CEO Brad Garlinghouse joined the criticism, accusing the U.S. government of stifling the crypto industry through “regulation by enforcement.”
He contrasted the hostile regulatory stance in the U.S. with more welcoming environments abroad, where digital innovation is flourishing. As the regulatory fight rages on, Ripple’s native token, XRP, saw a modest 2.5% rise over the past 24 hours, trading at around $0.5328.
On the Flipside
Traditional banks, such as HSBC and JPMorgan, have been involved in larger money laundering scandals, not cryptocurrencies.
People are statistically less likely to use cryptocurrencies for illegal activities compared to conventional banking.
Why This Matters
Alderoty critiques the New York Federal Reserve’s role in illicit transactions, exposing regulatory hypocrisy by highlighting how authorities overlook traditional banks while scapegoating crypto. This could prompt calls for fairer oversight and reshape how financial crimes are addressed in both sectors.
To learn more about Ripple’s new stablecoin, RLUSD, and whether there are limitations on who can invest, read here:Why Ripple’s RLUSD Stablecoin Could Be Off-Limits for Us PlebsCurious to know why Ripple’s co-founder, Chris Larsen, is endorsing Kamala Harris for president? This article explores his motivations and the potential impact on Ripple:Ripple Co-founder Backs Harris, Snubs Trump’s Deregulation Plan
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